New Delhi, July 13 -- Domestic auto sector is expected to report strong demand-led growth in Q1FY27, but rising raw material costs are likely to weigh on profitability, according to a report by Motilal Oswal Financial Services (MOFS).

The report noted, the aggregate automobile demand across original equipment manufacturers (OEMs) recorded robust growth of 24.5 per cent year-on-year in the first quarter of FY27.

The expansion was led by two-wheelers, surging 26 per cent, followed by passenger vehicles at 24 per cent, commercial vehicles at 20 per cent and tractors at 18 per cent.

"Demand has continued to be encouraging across segments in 1Q, as reflected in strong retail growth reported in Vahan. As a result, the overall auto industry v...